China Automotive Systems Reports 2020 First Quarter Results
China Automotive Systems, Inc. (NASDAQ: CAAS) reported a significant decline in net sales for Q1 2020, dropping 32.6% to $73.6 million due to the COVID-19 pandemic. Electric power steering sales fell 63.5% to $8.1 million. Despite the challenges, gross margin improved to 15.2% from 12.9%, and net income was $0.05 million, down from $1.5 million in Q1 2019. The company maintains a strong cash position of $132.6 million and expects a revenue target of $360 million for 2020, anticipating a rebound in the auto sector. A conference call will discuss these results further.
- Gross margin improved to 15.2% from 12.9% year-over-year.
- Maintained net income of $0.05 million despite a challenging market.
- Strong cash position of $132.6 million provides financial stability.
- Sales to North American customers remained consistent at $28.1 million.
- Net sales decreased 32.6% to $73.6 million compared to Q1 2019.
- Electric power steering product sales declined 63.5% to $8.1 million.
- Net income down from $1.5 million in Q1 2019 to $0.05 million in Q1 2020.
- Total parent company stockholders' equity decreased from $289.2 million to $283.8 million.
WUHAN, China, June 23, 2020 /PRNewswire/ -- China Automotive Systems, Inc. (NASDAQ: CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced its unaudited financial results for the first quarter ended March 31, 2020.
First Quarter 2020 Highlights
- Net sales decreased
32.6% to$73.6 million from$109.2 million in the first quarter of 2019 primarily due to the impact of the COVID-19 pandemic lockdown in China - Net sales of electric power steering ("EPS") products declined
63.5% to$8 .1 million from$22.2 million in the first quarter of 2019 - Net product sales to Fiat Chrysler and Ford in North America were
$28.1 million consistent with the same quarter last year - Gross margin increased to
15.2% compared with12.9% in the first quarter of 2019 - Net income attributable to parent company's common shareholders was
$0 .05 million, compared to$1.5 million in the first quarter of 2019 - Total cash and cash equivalents and pledged cash were
$132 .6 million
Mr. Qizhou Wu, chief executive officer of CAAS, commented, "Our extraordinary sales decline reflects the devastating impact of the COVID-19 pandemic on China's economy and especially the domestic Chinese automobile industry. China's GDP declined by
Mr. Jie Li, chief financial officer of CAAS, commented, "Even during the most difficult quarter in our Company's history, our operations continued to generate positive cash flow and our cash position improved. Our gross margin increased in the first quarter and we have maintained net profitability during this crisis. With our strong balance sheet and effective cashflow management, we remain financially sound."
First Quarter of 2020
In the first quarter of 2020, net sales were
Gross profit was
Gain on other sales was
Selling expenses were
General and administrative expenses ("G&A expenses") were
Research and development expenses ("R&D expenses") were
Other income was
Income from operations was
Interest expense was
Net financial expense was
Income before income tax expenses and equity in earnings of affiliated companies was
Net income attributable to parent company's common shareholders was
The weighted average number of diluted common shares outstanding was 31,174,119 in the first quarter of 2020, compared to 31,513,297 in the first quarter of 2019.
Balance Sheet
As of March 31, 2020, total cash and cash equivalents and pledged cash were
Business Outlook
By mid-March, most of the Company's production operations were up and running after the lockdown restrictions were lifted by the respective local governments as the COVID-19 outbreak subsided in China. In April, the Company regained its full operating capacity and reopened its Wuhan headquarters after a temporary relocation to Jingzhou City in March.
Mr. Qizhou Wu, chief executive officer of CAAS, further commented, "Industry data show that April and May auto sales in China experienced a strong rebound. We remain cautiously hopeful that the resilience of Chinese economy and large consumer base will propel a reasonable recovery of the auto sector in the remaining part of the year."
Management reiterates its revenue guidance for the full year 2020 of
Conference Call
Management will conduct a conference call on June 23, 2020 at 8:00 A.M. EDT/8:00 P.M. Beijing Time to discuss these results. A question and answer session will follow management's presentation. To participate, please call the following numbers 10 minutes before the call start time and ask to be connected to the "China Automotive Systems" conference call:
US Toll Free: | +1-877-407-8031 |
International: | +1-201-689-8031 |
China (toll free): | + 86 400 120 2840 |
A replay of the call will be available on the Company's website under the investor
About China Automotive Systems, Inc.
Based in Hubei Province, the People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through ten Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers four separate series of power steering with an annual production capacity of over 6 million sets of steering gears, columns and steering hoses. Its customer base is comprised of leading auto manufacturers, such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd. in China, and Chrysler Group LLC and Ford Motor Company in North America. For more information, please visit: http://www.caasauto.com.
Forward-Looking Statements
This press release contains statements that are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. These forward-looking statements include statements regarding the qualitative and quantitative effects of the accounting errors, the periods involved, the nature of the Company's review and any anticipated conclusions of the Company or its management and other statements that are not historical facts. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. As a result, the Company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the heading "Risk Factors" in the Company's Form 10-K annual report filed with the Securities and Exchange Commission on May 14, 2020 and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. If the outbreak of COVID-19 is not effectively and timely controlled, our business operations and financial condition may be materially and adversely affected as a result of the deteriorating market outlook for automobile sales, the slowdown in regional and national economic growth, weakened liquidity and financial condition of our customers or other factors that we cannot foresee. Any of these factors and other factors beyond our control, could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that we cannot predict and materially and adversely impact our business, financial condition and results of operations. A prolonged disruption or any further unforeseen delay in our operations of the manufacturing, delivery and assembly process within any of our production facilities could continue to result in delays in the shipment of products to our customers, increased costs and reduced revenue. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise.
For further information, please contact:
Jie Li
Chief Financial Officer
China Automotive Systems, Inc.
Email: jieli@chl.com.cn
Kevin Theiss
Investor Relations
+1-212-521-4050
Email: Kevin@awakenlab.com
-Tables Follow -
China Automotive Systems, Inc. and Subsidiaries | ||||||||
Condensed Unaudited Consolidated Statements of Operations and Comprehensive Income | ||||||||
(In thousands of USD, except share and per share amounts) | ||||||||
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Net product sales ( | $ | 73,555 | $ | 109,193 | ||||
Cost of products sold ( | 62,403 | 95,148 | ||||||
Gross profit | 11,152 | 14,045 | ||||||
Gain on other sales | 600 | 1,269 | ||||||
Less: Operating expenses | ||||||||
Selling expenses | 2,118 | 3,085 | ||||||
General and administrative expenses | 3,429 | 4,590 | ||||||
Research and development expenses | 5,053 | 6,602 | ||||||
Total operating expenses | 10,600 | 14,277 | ||||||
Income from operations | 1,152 | 1,037 | ||||||
Other income, net | 117 | 1,407 | ||||||
Interest expense | (365) | (568) | ||||||
Financial expense, net | (531) | (665) | ||||||
(Loss)/income before income tax expenses and equity in earnings of | 373 | 1,211 | ||||||
Less: Income taxes | 514 | 198 | ||||||
Equity in (loss)/earnings of affiliated companies | (347) | 211 | ||||||
Net (loss)/income | (488) | 1,224 | ||||||
Net loss attributable to non-controlling interests | (533) | (243) | ||||||
Net income attributable to parent company's common shareholders | $ | 45 | $ | 1,467 | ||||
Comprehensive income: | ||||||||
Net (loss)/income | $ | (488) | $ | 1,224 | ||||
Other comprehensive income: | ||||||||
Foreign currency translation (loss)/income, net of tax | (4,961) | 6,363 | ||||||
Comprehensive (loss)/income | (5,449) | 7,587 | ||||||
Comprehensive (loss)/income attributable to non-controlling interests | (897) | 214 | ||||||
Comprehensive (loss)/income attributable to parent company | $ | (4,552) | $ | 7,373 | ||||
Net income attributable to parent company's common shareholders per share | ||||||||
Basic - | $ | - | $ | 0.05 | ||||
Diluted - | $ | - | $ | 0.05 | ||||
Weighted average number of common shares outstanding | ||||||||
Basic | 31,174,045 | 31,507,487 | ||||||
Diluted | 31,174,119 | 31,513,297 |
China Automotive Systems, Inc. and Subsidiaries | ||||||||
Condensed Unaudited Consolidated Balance Sheets | ||||||||
(In thousands of USD unless otherwise indicated) | ||||||||
March 31, 2020 | December 31, 2019 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 108,171 | $ | 76,708 | ||||
Pledged cash | 24,398 | 29,688 | ||||||
Accounts and notes receivable, net - unrelated parties | 182,873 | 211,841 | ||||||
Accounts and notes receivable - related parties | 13,625 | 21,164 | ||||||
Inventories | 71,158 | 82,931 | ||||||
Other current assets | 16,885 | 18,833 | ||||||
Total current assets | 417,110 | 441,165 | ||||||
Non-current assets: | ||||||||
Property, plant and equipment, net | 134,261 | 140,437 | ||||||
Land use rights, net | 10,121 | 10,346 | ||||||
Long-term investments | 40,790 | 39,642 | ||||||
Other non-current assets | 27,395 | 28,374 | ||||||
Total assets | $ | 629,677 | $ | 659,964 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Short-term loans | $ | 44,057 | $ | 46,636 | ||||
Accounts and notes payable - unrelated parties< |
FAQ
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